It was early 2002, and in digging out from the financial impact of Sept. 11, 2001, the University of Hawaii needed some quick cash to help finish out the fiscal year.

It didn’t have to look far for some of it, passing the hat across Dole Street to the athletic department for what officials said was a $600,000 infusion.

It was not the first time Bachman Hall had tapped athletics for a "loan," but it was to be the last.

Since then, athletics has been the one with its hand out. The department has finished the fiscal year in the black just twice in a decade and, in the process, has run up an $11.3 million accumulated net deficit that UH regents have been told will likely hit $13 million when the current fiscal year closes June 30.

At their Thursday meeting, the regents are scheduled to hear Manoa Chancellor Tom Apple’s plan to "forgive" the accumulated net deficit and the outline of his strategy to eliminate future deficits in the $33.5 million operation.

The moves come four months after an independent auditor said the department was "technically insolvent" and the regents ordered Apple to come up with a long-term solution.

By running the deficit, Cory Kubota of the auditing firm Accuity LLP has told the regents, "athletics is, in effect, borrowing cash from other university units." Regents Vice Chairman Carl Carlson Jr. has said the accumulated deficit equates to about $500 per Manoa student, $200 per UH system student and $1 per state of Hawaii citizen.

UH said athletics pays approximately $75,000 a year in interest on the debt, and Apple told Ka Leo o Hawaii, the campus newspaper, last week, "If we’re not breaking even in three years, I really have to look at whether we will continue Division I-A athletics."

SIMILAR COMPLAINTS

Ben Jay, who became director of the 20-sport athletic program four months ago, is the latest in a line of administrators and coaches to warn that UH has relied on a long-broken, obsolete financial model too dependent upon gate receipts.

ADs as far back as Stan Sheriff (1983-93) have complained about the incongruity of being charged for cleanup and trash removal at Aloha Stadium when the school does not share in concession or merchandise sales. They have railed against being denied campus parking revenue produced by athletic events.

But Jay is the first to put a timetable on getting the department’s finances in order. "If we can’t get this done in the next three years, we’re gonna be left out, and I don’t know what kind of a program we are gonna be," Jay said. "If we’re trying to position ourselves for the future — and to me there is a sense of urgency — then we need to get it done in the next three years."

"Quite frankly," Jay said, "if we’re not part of the big boys — and part of that group of super conferences — we’re gonna be left out of the revenue streams (TV, postseason) that will keep us viable."

Jay said retiring the debt is but a part of the solution. "This can’t be just done through the university. The chancellor and I agree that it is going to take everybody — the fans, the community, the corporate donors, everyone — to be on board, to help us do this."

MONEY QUESTIONS

That Apple hasn’t publicly said where the money to "forgive" the deficit will come from has raised concern and speculation on campus.

In a meeting with members of the Manoa Faculty Senate on Friday, "Chancellor Apple confirmed verbally that he had planned to move the athletic department’s debt to the Manoa chancellor’s office and pay it off slowly with operational funds available to him," said Bonnyjean Manini, outgoing chairwoman of the Faculty Senate.

"He said it is not his intention to use academic funds. Whether he defines tuition money as academic funds is not clear since the past and current reduction in general fund appropriations from the state Legislature causes the need for us to use tuition money to help cover some operational expenses (e.g. utilities, renovation projects)," Manini said.

Manini, speaking as an individual faculty member, said covering the debt is only half the solution.

"Very few athletics programs in the country can sustain themselves financially. With the continuous reductions in state general funds being appropriated by our legislators to (UH), it is not realistic for our larger community to expect our campus to continue to fund this extremely expensive program. I only support the forgiveness of the $11.3 million athletics department debt if our director, Ben Jay, has a three- to five-year plan to show how his administration will balance its budget going forward, based on actual and not projected revenues."

Manini said, "Without a solid plan and accountability on a year-to-year basis, forgiving the debt now may cause a precedence for forgiving future debt. This would not serve the best interest of a public institution of higher learning whose primary objective is to educate and graduate our students."

SUBSIDIES COMMON

Several UH presidents, including David McClain (2004-09), who characterized athletics as the "front porch of the university" for the visibility it brings the school, have defended subsidies.

McClain maintained that "only a fraction of schools succeed in making athletics be a tub on its own bottom."

A USA Today survey of 228 NCAA public Division I institutions this year found that just 10 percent covered their expenses, and those were all Bowl Championship Series conference members, who share in the biggest postseason payoffs and most lucrative TV contracts.

For example, Oregon State, which the Warriors will play in football Sept. 7 in Corvallis, Ore., received $18.7 million in subsidies in a $56 million budget in 2012.

At UH between 2006 and 2011, about 33 percent of the athletic department’s approximately $30 million in expenditures was subsidized by the state, school or students, according to USA Today.

That ranked UH 10th among the 12 schools of the Mountain West Conference, where it competes in football. Among 10 Big West members, against whom UH competes in most other sports, UH was at the bottom.

UH President M.R.C. Greenwood has backed subsidies, saying, "The UH Warrior football team is, to all intents and purposes, Hawaii’s team and, as such, means a great deal to our residents."

REDUCED ATTENDANCE

Until then-UH President Evan Dobelle "swept" the athletic reserve fund in 2002, the department had regularly stayed in the black.

Never flush with money, it operated on a lean budget, and only once in the previous decade, under then-athletic director Hugh Yoshida, had it not at least broken even, officials said. That dip followed the 0-12 football season of 1998.

But that was bailed out by the so-called "rainy day" fund, where athletics was required, by mandate of the Legislature, to bank the surpluses from the good years for future needs.

Of course, back then the football team averaged 35,704 a game through the turnstiles, and men’s basketball brought in 5,068 for each game, on average. Now it is 25,573 and 3,398, and some coaching salaries have doubled.

In addition, UH now pays travel subsidies to opponents in both the Mountain West and Big West, a combined $1.1 million annually.

REVENUE CRUNCH

Football is the major money for the schools in the Mountain West, and the wellspring is the stadiums they play in, thanks to not only ticket sales, but concessions, parking, merchandising and signage.

Of the 12 MWC schools, only UH and San Diego State do not own or control the stadiums they play in. And only UH has no share in concessions or merchandising.

The Aztecs, who play in city-owned Qualcomm Stadium, pay operating expenses plus $1 a ticket in facility fees, SDSU spokes­man Mark May said. In exchange the school receives "100 percent of net parking and concessions revenues."

UH had paid as much as $875,000 in rent and operating expenses at Aloha Stadium annually and has long sought terms similar to the Pro Bowl, which pays no rent and retains all parking, signage and merchandising rights.

Since a 2008 renegotiation, UH no longer is charged rent and pays operating costs of about $80,000 a game.

Though it is the primary sports tenant of Aloha Stadium, UH said it did not share in the $2.5 million that Hawaiian Airlines paid for naming rights for the field, nor does it share in the approximately $150,000 in rights fees the stadium takes in from Aloha Sports Properties for scoreboard and upper-level signage.

UH does keep revenue from on-the-field sideline signboard advertising.

In addition, the stadium makes 3,177 parking stalls, 39 percent of the inventory, available for purchase to UH. The department packages them to premium-paying donors, for which it said it earned $350,000 in 2012.

Bills in the Legislature that would have given UH as much as 25 percent of stadium revenues have died in committee in recent years. The Stadium Authority has told lawmakers the facility would run its own deficit were it to share proceeds with UH.

On its own campus, things are only slightly better, with athletics receiving a small portion of concessions and merchandise but no parking, although its events are the major reason for night and weekend visitors. UH has estimated that it could earn an additional $250,000 to $500,000 a year if it shared in on-campus parking and merchandising.

SECOND OPPORTUNITIY

This isn’t the first time there has been a move to "forgive" the mounting accumulated net deficit.

In 2005, officials said they strongly considered erasing a then-$5 million accumulated deficit but backed off, an athletic department figure said, over concerns about faculty uproar. In 2009 an operational review of the athletic department commissioned by the regents and compiled by former Wyoming, Fresno State and UC Santa Barbara athletic director Gary Cunningham recommended UH "forgive the accumulated net deficit."

But the review, for which UH paid $10,000, was given little credence. Asked about the report’s whereabouts, a Bachman Hall official said, "It was put on a top shelf somewhere to gather dust."